A loan is an amount of money borrowed by an individual or business. To repay the debt, the borrower must make a monthly payment and pay back the principal.
An individual may need financial assistance that might be required to meet an emergency or purchase an asset. But due to high costs or insufficient financial resources, it might be challenging to fulfill it. A loan or credit may help an individual in this situation.
A loan provides all the money requested in one go at the time it is issued, whereas, in the case of a credit facility, a bank or a financial institution provides the customer with an amount of money that could be used as per the requirement or by using the entire amount or partly.
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